Turning the Tide on Unfair Business Practices in E-Commerce

Speaking at an event to mark World Consumer Rights Day, CGSO CEO Queen Munyai said that the report reflected the Ombud office’s growing frustration that legislation designed to protect consumers from unfair business practices has not kept pace with changes in consumer behaviour.

“For the last five years, e-commerce has accounted for more than 20% of all consumer complaints received by the CGSO. These complaints range from misleading advertising to non-delivery and late delivery, damaged goods, unsafe goods, non-compliant return policies, refunds that never materialise, and counterfeit products sold through third-party sellers on major platforms. Each of these contravenes consumer rights.

“As a mediation body, we have no power to enforce our recommendations. If a vendor or supplier refuses to engage with us or rejects our recommendation, the consumer has two options: they can approach the NCC or pursue the formal legal route, which is costly and can take years to resolve. Additionally, our mandate is restricted to the consumer goods and services sector. Complaints that relate to other industries are referred to the respective regulatory bodies, a fragmented approach that can cause complaints to fall through the gaps and give a skewed impression of the magnitude of the problem. This report advocates for a dual approach that combines enforcement and advocacy measures with legislative amendments to tackle unfair business practices online,” said Munyai.

The NCC Acting Commissioner, Mr Hardin Ratshisusu, said, “The digital marketplace has transformed how South Africans shop, but it has also created new and complex vulnerabilities that require a joint effort with other regulators to enhance protection of consumers.  The NCC’s position is unequivocal: platforms that profit from facilitating transactions between sellers and South African consumers cannot disclaim responsibility when those consumers are harmed. This paper is a call to government, industry, and the platforms themselves to close that accountability gap. The NCC will use every tool available under existing law while we advocate for the reforms this moment requires.”

The paper puts forward a range of short-, medium-, and long-term recommendations.

These include:

• Proposed amendments to the Consumer Protection Act No. 68 of 2008 (CPA), Electronic Communications and Transactions Act No. 25 of 2002 (ECTA), to close gaps around cooling-off periods, return costs, and online trade descriptions, ensuring consumers receive the same protection whether they shop in-store or online.
• The mandatory appointment of local representatives for offshore e-commerce retailers operating in South Africa, to give consumers and regulators a credible point of contact for complaints and compliance.
• Imposing joint liability for platforms that host third-party sellers, bringing South Africa’s approach closer to international precedent, including the 2020 California court ruling that held Amazon liable for injuries arising from third-party products. Currently, if a consumer has an issue with a hosting platform, they are referred to the third-party seller, thereby shifting responsibility for dispute resolution and ensuring compliance with the CPA and ECTA.
• The development of a central complaints handling platform to improve coordination between regulators and ombuds offices.
• Exploration of a RAPEX-style (Rapid Exchange of Information) product safety alert system for South Africa, enabling real-time exchange of information on hazardous consumer products being sold or promoted online.

The report also identifies the need to strengthen POPIA enforcement around data consent for consumers.

The NCC and CGSO are committed to expanding consumer education campaigns and engaging with the dtic’s E-Commerce Advisory Committee to shape the regulatory framework to bring South Africa in line with international best practice when it comes to protecting consumers online.

The full joint paper is available on the CGSO and NCC websites.